Suro Capital Corp. · NASDAQ:SSSS
Suro Capital — GSV Capital — Shareholder Meeting (June 2012)
36 slides from Suro Capital's shareholder meeting presentation, Jun 7, 2012
Slide 1: Annual Shareholder Meeting
Annual Shareholder Meeting Michael Moe, CEO June 5, 2012
Slide 2: Forward-Looking Statements
2 This presentation contains forward looking statements that involve substantial risks and uncertainties. All forward - looking stat ements included in this presentation are made only as of the date hereof and are subject to change without notice. Actual outcomes a nd results could differ materially
Slide 3: GSVC Summary
Disciplined investment approach and demonstrated access to attractive pre - IPO opportunities 3 GSVC Summary Capitalizing on favorable dynamics for private company investing – disruptive technologies and longer time to liquidity Diversified portfolio of leading high - growth VC - backed companies Ac
Slide 4: Fast Facts: Past Months
4 Past 12 Months… Completed IPO in April 2011 with an innovative public security to invest in the fastest growing private companies in the world GSVC provides access for public investors as well as liquidity and capital for private companies Raised nearly $300 million of gross proceeds in 4 offering
Slide 5: Investment Portfolio
5 Investment Portfolio GSVC has made $ 150mm of investments in 32 companies since the IPO ($3.8mm) ($2.3mm) ($31.5mm ) ( $2.0mm ) ($5.5mm) ($2.5mm) ($0.7mm) ($10.0mm) ($4.0mm) (1) ( $10.5mm ) ($2.0mm) ($ 0.3mm ) ($4.9mm) ($3.5mm) ($2.0mm) ($ 1.5mm ) ($5.0mm) ($0.75mm) ( $11.9mm ) ($2.0mm) ($ 1.3mm )
Slide 6: Investment Timeline
6 Investment Timeline IPO 4/28/2011 Raised $46.5mm First Follow - On 9/23/2011 89% of IPO proceeds invested Raised additional $29.6mm Second Follow - On 2/10/2012 85% of total proceeds invested Raised additional $96.3mm $0.21mm $0.71mm $0.28mm $0.19mm $0.20mm $0.90mm $3.25mm $4.00mm $0.25mm $2.00mm
Slide 7: GSVC's Investing Ecosystem
7 GSVC ’ s Investing Ecosystem Michael Moe, CFA Stephen Bard, CFA Paul Lapping Luben Pampoulov Matthew Hanson, CFA Mark Flynn Mark Klein Michael Moe Leonard Potter David Spreng Scott Bedford Todd Bradley Bill Campbell Bob Grady Marc Mazur Dave Crowder Advisory Board Board of Directors
Slide 8: GSVC: Connecting Investors With Opportunity
GSVC: Connecting Investors With Opportunity 8 Growth Investors GSV Investments Retail – Non - accredited investors cannot access the private market – Accredited investors must manage the complexity of the private market Institutional – May be prohibited by charter – Private companies – “Large cap” g
Slide 9: Private Company Cap Tables Remain Closely Guarded
9 Private Company Cap Tables Remain Closely Guarded Regulatory Reputational Must have limited number of shareholders in order to remain a non - reporting entity – GSVC counts as one investor, despite being public with many shareholders Companies often impose strict transfer restrictions to limit num
Slide 10: IPO Markets Have Experienced Substantial Structural Changes
3.1 5.7 9.4 0 2 4 6 8 10 2000 2005 2010 10 IPO Markets Have Experienced Substantial Structural Changes SOX compliance has dramatically increased the costs and regulatory burden of going public Fewer small - cap focused investment banks and limited availability of research coverage Investors demandin
Slide 11: Potential for Substantial Returns Shifting to Private Investors
Recent Est. Valuation $8.4bn (1) $4.0bn (2) $2.5bn (3) $2.1bn (4) $1.6bn (5) Potential for Substantial Returns Shifting to Private Investors 11 Source: GSV Insight Past High - Growth IPOs Value of Private Companies Today Companies that would have been public in prior years are staying private longer
Slide 12: Top Positions
Top 10 Positions 12 Investment Size ($ mm) % of Fund 2012 Estimated Growth (1) 1 $31.5 11.6% ~200% 2 $14.8 5.4% ~300% 3 $11.9 4.4% ~300% 4 $10.5 3.8% ~35% 5 $10.0 3.7% ~300% 6 $10.0 3.7% ~25% 7 $5.5 2.0% ~25% 8 $5.0 1.8% ~30% 9 $4.9 1.8% ~150% 10 $4.2 1.5% ~100% ( 1) Estimated. There is no guarantee
Slide 13: Current Portfolio Structure – Lifecycle Stage
13 Current Portfolio Structure – Lifecycle Stage (1) Percentage calculated as a % of the total value of investments held as of June 5, 2012 net of cash which represents the total fair value of investments held as of March 31, 2012 plus the total purchase cost, exclusive of transaction fees and costs
Slide 14: GSVC's Sweet Spot
14 GSVC ’ s Sweet Spot Time Revenue A significant opportunity lies between early stage investments and eventual exit Early - Stage Venture Late - Stage Venture Growth Equity Post - IPO Typical VC Investments NestGSV
Slide 15: Investment Strategy
Investment Strategy © csv Capital
Slide 16: GSVC Philosophy
GSVC Philosophy 16 Over time, equity value is highly correlated to revenue and earnings growth. Growth drives stock price.
Slide 17: Top Performing Stocks – 2001 to 2011
Top Performing Stocks – 2001 to 2011 Company Stock Mkt Cap (mil) EPS Revenue CAGR 12/31 /01 12/31 /11 CAGR 2001 2011 CAGR 1 Monster Beverage Corp. 68% $42 $8,024 55% $81 $1,703 36% 2 Deckers Outdoor 49% $40 $2,918 54% $91 $1,377 31% 3 NewMarket Corp. 46% $77 $2,656 45% $708 $2,150 12% 4 Sohu.com Inc
Slide 18: Top Performing Stocks – 2001 to 2011 (continued)
Top Performing Stocks – 2001 to 2011 18 Median 39% $78 $3,382 29% $178 $1,377 25% Company Stock Mkt Cap (mil) EPS Revenue CAGR 12/31 /01 12/31 /11 CAGR 2001 2011 CAGR 16 Intuitive Surgical 37% $363 $18,055 49% $52 $1,757 42% 17 Chemical & Mining 37% $617 $14,173 30% $526 $2,145 15% 18 Green Mountain
Slide 19: Rapid Cumulative Revenue Growth
$2.3 $2.6 $2.9 $0 $1 $1 $2 $2 $3 $3 $4 2010 2011 2012 Rapid Cumulative Revenue Growth $4.2 $11.9 $24.1 $41.9 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 2010 2011 2012 2013 19 ($ in billions) Portfolio Growth Rate Median Market Cap 115% $120 million ($ in trillions) GSVC Portfolio – 32 Investments (1) NAS
Slide 20: We Are In The Midst of Game-Changing Growth Themes
20 We Are In The Midst of Game - Changing Growth Themes… Cloud Green Tech Internet Commerce Social - Mobile Education Technology
Slide 21: Current Portfolio Structure – Investment Themes
Green Tech 6% Education Tech 24% Internet Commerce 17% Cloud 21% Social Mobile 32% 21 Current Portfolio Structure – Investment Themes (1) Percentage calculated as a % of the total value of investments held as of June 5, 2012 net of cash which represents the total fair value of investments held as of
Slide 22: Creating Unprecedented Return Opportunities
…Creating Unprecedented Return Opportunities 22 Source: The Mobile Internet Report by Mary Meeker (12/15/2009); Facebook and Apple data based on public SEC filings (1) AOL subscribers data not available before CQ3:94; Netscape users limited to US only Note: Facebook users calculated from May 2006 wh
Slide 23: GSV Follows a Disciplined Investment Process
GSV Follows a Disciplined Investment Process 23 Access Targeting 150+ companies Assessment 50+ companies 2000+ VC - backed companies Valuation 30 companies Optimized portfolio of 25 - 35 companies to date Strict adherence to our investment themes and focus on growth opportunities Applying our propri
Slide 24: Disciplined Company Selection: The Four Ps
24 Disciplined Company Selection Our evaluation process is based on “ The Four Ps ” Differentiated and disruptive products with leading market positioning Large addressable markets Organizations led by strong management teams with in - depth operational focus Ability to forecast and drive predictabl
Slide 25: Case Study: Twitter
25 Case Study: Twitter Other Investors Investment: $31.5mm Investment Information Twitter is a real - time information network utilizing short - message microblogging available on the web and mobile applications 140 million monthly active users (MAUs) growing to an estimated 250 million MAUs by Q4 2
Slide 26: Facebook and Twitter Comparison
$2.64 $1.88 $2.16 $3.25 $4.39 $0.82 $1.26 $1.58 $2.58 $4.58 2007/2010 2008/2011 2009/2012 2010/2013 2011/2014 Facebook Twitter Facebook & Twitter (1) Comparison 26 $153 $272 $777 $1,974 $3,711 $45 $158 $395 $1,289 $4,007 2007/2010 2008/2011 2009/2012 2010/2013 2011/2014 Facebook Twitter (Revenue $ i
Slide 27: Case Study: Violin Memory
27 Case Study: Violin Memory 27 Violin provides a disruptive product with a strong enterprise customer base and has the potential to become the leader of the $15 billion Performance Optimization market Growth Potential: Other Investors Investment: $14.8mm Investment Information Violin Memory is a le
Slide 28: Case Study: Dropbox
28 Case Study: Dropbox 28 Sticky, dependent model with recurring revenue Growth Potential: Other Investors Investment: $11.9mm Investment Information Dropbox is a leader in cloud - based digital file storage and device - agnostic sharing/ syncing. Its service enables the user to access and edit file
Slide 29: Case Study: Facebook
29 Case Study: Facebook 29 Massive network effect with large opportunity to monetize user traffic Growth Potential: Other Investors Investment: $10.5mm Investment Information Facebook is the largest social media platform in the world Its service enables people to connect, socialize, and share inform
Slide 30: Case Study: Avenues
30 Case Study: Avenues 30 Avenues addresses the substantial demand imbalance for access to elite schools in the major cities around the world. It is led by p remier education leaders including former President of Yale University, former head of Phillips Exeter, and Hotchkiss Growth Potential: Other
Slide 31: Case Study: Chegg
31 Case Study: Chegg 31 The central education network and platform company with an opportunity for rapid expansion to providing every essential student service Growth Potential: Other Investors Investment: $10.0mm Investment Information Chegg is a leading online platform for students with apps such
Slide 32: Case Study: Gilt Groupe
32 Case Study: Gilt Groupe 32 Coveted fashion brands at clearance prices have allowed Gilt to gain a loyal following Growth Potential: Other Investors Investment: $5.5mm Investment Information Gilt Groupe is an online portal for premier luxury lifestyle brands It provides its members with access to
Slide 33: Case Study: Control4
33 Case Study: Control4 33 Control 4 will be the leader in home automation as homeowners continue to look for increased convenience and automation in their homes Growth Potential: Other Investors Investment: $5.0mm Investment Information Control4 is a leading provider of the operating system for the
Slide 34: Case Study: Silver Spring Networks
34 Case Study: Silver Spring Networks 34 Silver Spring’s smart grid is the most feasible solution for addressing current energy transmission problems in the US Growth Potential: Other Investors Investment: $4.9mm Investment Information Silver Spring Networks transformed the existing infrastructure i
Slide 35: Case Study: Palantir Technologies
35 Case Study: Palantir Technologies 35 Palantir has superior technology and algorithms and customers are increasingly looking to partner with Palantir Growth Potential: Other Investors Investment: $4.2 mm Investment Information Palantir Technologies is a “big data” company that uses its proprietary
Slide 36: GSVC's Competitive Advantages
Disciplined and repeatable investment process 36 GSVC ’ s Competitive Advantages Deep relationships with significant credibility to source and complete transactions Source of permanent investing capital Highly experienced team of investment professionals Leader in new category with an early mover ad